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États-UnisImmobilier2018–2021Zillow
Zillow Offers home-buying business (iBuying)
Zillow announced the closure of its home-buying business after price forecasts missed, recording a $304 million write-down and planning a 25% staff cut
Problématique
Zillow, whose real-estate sites drew more than 220 million users a month, had built its core business on those sites and the advertising sold on them, and wanted a direct role in home transactions. Buying homes directly from sellers and reselling them required forecasting each home's price three to six months ahead.
Approche
From 2018 Zillow Offers bought homes for cash at prices set with the help of its pricing models, renovated them and put them back on the market, aiming for margins within 2 percentage points of breakeven. In the third quarter of 2021 it bought 9,680 homes, far more than its renovation and resale teams could handle, while home prices moved in ways its models had not expected. On 2 November 2021 Zillow announced that it would wind the business down.
Chiffres clés
Enseignement
Zillow used forecasts to set the prices it paid for homes, so errors became inventory losses. The company attributed the closure to market volatility and operating capacity as well as the pricing models; its CEO said home-price unpredictability far exceeded expectations.
Catégories
- Secteur
- Immobilier
- Fonction de l’entreprise
- Stratégie et organisationFinance, risques et juridique
- Type d’innovation
- Innovation de modèle d’affaires
- Technologie d’IA
- Analyse prédictive et apprentissage automatique
- Mode d’adoption
- Développement interne
- Type de preuve
- Déclaration de l’entreprise
Sources
Résumés des sources
Zillow announced that it would wind down Zillow Offers over several quarters and cut its workforce by about 25%. It reports a write-down of about $304 million on homes bought above current estimates of resale prices and expects another $240 million to $265 million of losses in Q4. CEO Rich Barton is quoted saying the unpredictability in forecasting home prices far exceeded what the company had anticipated.
Zillow said its Offers business depended on forecasting home prices three to six months ahead, and that its margin per home swung by about 12 percentage points between Q2 and the outlook for Q4 2021. It reports 9,680 homes bought and 3,032 sold in Q3 2021, a $304 million inventory write-down and an average gross loss of $80,771 per home sold. Management concludes there are less risky ways to serve home sellers.
HousingWire estimated that Zillow's planned 25% cut of its roughly 6,420 staff would affect about 1,605 jobs. It notes the company had already paused purchases on 17 October citing capacity limits, and reports a Q3 net loss of $328 million. HousingWire reported 3,036 homes sold in the quarter, while Zillow reported 3,032.
Les informations complètes figurent dans les sources d’origine.
